Westminster City Council is planning almost £20mn in “savings” over the next financial year, budget reports to councillors have revealed.
Council officers say the measures are aimed at tackling a £15mn budget “gap” expected for the 2025-26 financial year. The gap is expected to equal £55mn over a three-year period but could shrink to £40mn with the savings currently being proposed for next year’s council budget.
A report by the council shows an uplift in employers’ National Insurance contributions from 13.8 percent to 15 percent will also impact the council’s overall costs.
During a meeting of the first of four sessions of the Budget Scrutiny Task Group on Tuesday 12 November chaired by Cllr Paul Fisher (West End, Labour) it was confirmed staff directly hired by the council would have this uptick covered by the Government.
The council said it has identified £28.9mn in “savings options” over the next three years with the bulk — £19.9mn — expected to kick in from 2025-26.
It is not clear what these savings are and how they will impact services. The council is also proposing £10.1mn in investment proposals and is expecting to experience £12.8mn in “service pressures” during the next financial year.
The report read: “Most significantly this includes demand and complexity pressures within Adults Social Care, increases in care leavers and uncertainty over health funding in children’s Services, accommodation for increased rough sleepers and temporary accommodation staffing support.”
None of the proposals take into account any decision on the level of council tax rises for future years. The report states for every one percent increase, the net yield for Westminster Council would be £690k.
The council won’t find out how much it will receive in government funding for next year until December and said funding levels beyond this is uncertain.
Among the pressures the council faces is a steep rise in temporary accommodation placement and adult social care. During the meeting on Tuesday, Cllr Liza Begum, cabinet member for housing services, said for every one percent increase in homelessness not already budgeted for would cost the council £450k.
Council officers said the council had one of the largest proportions of rough sleepers and temporary accommodation seekers in the capital. The same report showed roughly 18 percent — or 752 — of London’s street homeless contacted by outreach teams are located in the borough, up from last year’s 16 percent.
The Housing Department is estimating £6.3mn in “efficiency savings” for 2025-26 to cope with increased pressures. A report by the council found a lack of affordable housing, an increasing reliance on the private rental market, benefit caps and the rising cost of living has put a significant proportion of Westminster residents at risk of deprivation or homelessness.
The same report shows the net cost for temporary accommodation has risen 745 percent since 2021-22. In 2021, the council’s net expenditure on temporary accommodation was £4.46mn. That has now risen to £37mn.
The housing department is planning to increase rental income, introduce a £750k reduction in overheads and reduce the number of nightly-booked accommodation. A final budget is expected before the Full Council in March.
Westminster City Council, Budget Scrutiny Task Group, Tuesday 12 November 2024.
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